There are more than thousands of cryptocurrencies available in the market. However, the experts say that an investor should take a hard pass on the cryptos before investing in them. The value of cryptocurrencies fluctuates every hour; it is specifically true for the lesser-known coins. The established crypto coins like Bitcoin and Ethereum also undergo volatility changes.
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But there are still chances for these cons to increase their value with time. Bitcoin is the most valuable and widely used cryptocurrency in the crypto space. Before you plan to invest in cryptocurrencies, you must understand the characteristics and features of these digital coins. It will help you in better trading.
Features Of Cryptocurrency
Cryptocurrencies are digital assets that are the value of money held by the owners for payment. These currencies have high popularity in aspects the traditional crypto coins lack. Their main features are as follows:
- The transactions of cryptocurrencies are anonymous. They are recorded in a random sequence form instead of revealing the data of the owner or the company.
- The absence of third-party intermediaries restricts the extra fees levied on the users.
- The cryptocurrencies are stored in a virtual wallet highly secured by the crypto exchange platform. It comes with a private key only accessible by the coin holder.
- No central authorities or financial institutions control the quotations or flow of cryptocurrencies.
- The traders can convert their crypto coins to fiat currency like Euro and Dollars as per the guidelines of the crypto trading exchange.
- As there is no central governance, the market commissioned transactions can not be reversed.
How To Buy Cryptocurrency In Four Simple Steps
The cryptocurrency industry is a highly lucrative and speculative investment. Altcoins like Binance Coin amplify these aspects. Hence, it is advisable that you only invest that amount of money in crypto, which you are prepared to lose. Here are the steps to purchase our favorite crypto coin, including Bitcoin.
Select A Cryptocurrency Trading Exchange
Any cryptocurrency can not be purchased through banking institutions or other financial institutions. Therefore, in the present scenario, you will have to select a cryptocurrency trading platform from which you can convert your fiat currency to Bitcoin or any other cryptocurrency. Looking at the growing demand of the cryptocurrency market, there are many crypto trading platforms.
Some popular ones are Gemini, Binance, Coinbase and Kraken. These exchanges are like any other platform where you can purchase or sell your crypto coins. Moreover, there are some factors which affect your selection of cryptocurrency exchanges. These are:
- The platform you select must be FDIC insured
- Select a crypto exchange which uses cold or offline storage for the protection of your coins
- The exchange must have a considerable transaction fee worth its security and other features.
- The platform must have a wide range of crypto coins for the traders to select.
Funding The Account
Spending on the account you select, you will have to provide basic information like your name, address and phone number for verification. In some cases, you might also have to provide your Social Security number and your source of income while creating the account. Almost every cryptocurrency trading exchange will be able to connect with your bank account or debit card for the transfer of US dollars into the exchange’s account.
The fee rate is different for funding the account. Bank transactions cost less compared to card transactions. However, funding the account is not the same as purchasing crypto coins. It is just a part of cryptocurrency trading. Further, you will have to exchange your fiat currency for the crypto coin.
Placing An Order
Once you have connected a payment method with your cryptocurrency exchange platform, you can place an order for your favorite crypto coin. However, this procedure differs from exchange to exchange. In most simple cases, you must select a platform like Coinbase or Gemini and enter the trading amount in Dollars.
Later, you get your preferable crypto coin following the current market rate after accounting for any other fees. In the case of Bitcoin, most traders prefer to purchase a fractional share of the coin as the entire coin costs $20,000 approximately.
Practicing Safe Storage
A cryptocurrency wallet is the best place to securely store your crypto coins. Different trading platforms offer different levels of security associated with the crypto coin. In addition, some exchanges offer a facility of moving the crypto coin from their wallet to a more safe and secured wallet.
You can also opt for third-party software, cold storage, or offline storage of the crypto coins. However, many platforms might not allow you to shift the crypto coins to your own storage platform. Consider this important factor before buying any crypto coin from that respective platform.
The Final Takeaway
Cryptocurrency trading has become a very important aspect of today’s financial world. However, there are chances that you might incur losses as well. Remember, you must only invest the amount you are ready to lose. Besides this, you must consider the essential factors before purchasing a crypto coin from a particular trading platform.
